McCarthy to talk US debt with Biden
Janet Yellen warns of global financial crisis
House speaker Kevin McCarthy said he would meet tomorrow with Joe Biden to discuss avoiding a US debt default, but warned the president must rethink his refusal to consider spending cuts in exchange for raising the borrowing limit.
“I want to find a reasonable and a responsible way that we can lift the debt ceiling,” while controlling what he called runaway spending by Congress, the Republican leader told CBS Sunday show Face the Nation.
The talks will be Mr McCarthy’s first with the president since he became speaker of the House of Representatives this month after Republicans won control of the chamber.
The raising of the national debt limit — which allows the government to pay for spending already incurred — is often routine.
But members of the new House GOP majority have threatened to block the usual rubber-stamping of that increase above the current US$31.4 trillion.
Mr Biden says the matter is nonnegotiable, accusing the GOP of taking “the economy hostage” in order to push a purely political debate on government spending.
Reflecting the White House’s refusal even to frame tomorrow’s meeting as a negotiation, Mr Biden’s official agenda said merely that he would discuss “a range of issues” with the GOP speaker.
Raising the debt ceiling “is an obligation of this country and its leaders to avoid economic chaos”, White House spokeswoman Karine Jean-Pierre said recently. “Congress has always done it, and the president expects them to do their duty once again.”
“That is not negotiable.”
That sets the stage for a high-stakes clash in the weeks or months ahead.
A US debt default could trigger a global financial crisis, sending borrowing costs up and undermining the role of the dollar as an international reserve currency, Treasury Secretary Janet Yellen has warned.
To provide time for the two parties to find a solution and avoid a default, the Treasury Department on Jan 19 began taking “extraordinary measures” to help temporarily reduce the amount of outstanding debt subject to the limit.
Absent an agreement, Ms Yellen said, default could come as early as June.
But while Mr McCarthy expressed confidence “there will not be a default,” he argued Democrats were guilty of historically high spending levels during the first two years of the Biden administration.
“We can’t continue down this path,” he said on CBS.
A Democratic congressman, Adam Smith of Washington state, pushed back, saying Republicans had failed to clarify where exactly they would cut spending.
“Right now, Republicans don’t have a plan,” he said on Fox News Sunday.
“Their plan, as led by the extremists in their party, is to complain about spending, not raise the debt ceiling but not actually offer a plan that says, ‘This is where we’re going to cut.’”
He added: “Give us an option and then we can argue about that.”
But Mr McCarthy voiced optimism that a deal can be reached to avert default.
“I want to sit down together [with Biden], work out an agreement that we can move forward to put us on a path to balance,” the speaker said.
He added: “I think the president will be willing to make an agreement together.”
Ms Jean-Pierre has said the meeting tomorrow would also cover the president’s plan to cut the US budget deficit “by making the wealthy and big corporations pay their fair share”, rather than, as some Republicans propose, cutting politically sensitive social spending.